3 lessons from Transurban about building a company for the long term

Transurban was shrouded in controversy at the very beginning. As one of the first public private partnerships (PPP), it was new and exciting, but there was considerable opposition from all corners.

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Transurban was shrouded in controversy at the very beginning. As one of the first public private partnerships (PPP), it was new and exciting, but there was considerable opposition from all corners.

The journey for me was 13 years on the board. Over that time we created an innovative business that went from start-up to world leader. The three lessons that stand out from the very early days are:

1. The importance of culture

2. Never under-estimate the power of diverse talent

3. The importance of really understanding your business

1. Culture is critical to long-term success

When I first joined the board of Transurban the company didn’t enjoy the best of reputations. I started with the company the day that our then Premier threw a shovel full of dirt over the media. I laugh now that when I told my mother that I'd been invited onto the board of Transurban she said, "oh my Lord what will I tell my friends"?

There were concerns from all corners, from government, environmental groups and the public about the project. But management was imbued with a tremendous sense of social purpose. We were doing something new, after all nobody had done multi-lane free flow technology before. There was great value in what we were doing, and this was particularly motivational. We wanted this ownership and pride to permeate the organisation and blanket any external negativity.

Management led the way by building out a culture around learning and health. The board brought forward ideas and management were always receptive. We formed a corporate social responsibility committee and were one of the first Australian organisations to be included in the Dow Jones Sustainability Index. People felt proud to be a part of an organisation that didn’t just give lip-service to the values of social responsibility, but that actually lived them.

2. Great talent has many dimensions

As a board member, you sometimes find that you put forward ideas and suggestions but nothing shifts. Often there’s a silent push back happening in the background. This was not the case at Transurban and I put that down to the diversity of the team.

While diversity is often a sweeping generalisation, we had not only a good representation of women in senior roles, but also a mix of public and private sector backgrounds. The management team brought different perspectives to the table, and they worked with the board in a way that was respectful and transparent.

Importantly, rather than just hiring from private enterprise, many members of senior management came from the public sector. They brought with them a sense of social good and alignment. Their presence helped anchor the business in a sense of purpose – our work was good for Melbourne, good for Australia.

3. Develop a deep understanding of the business you are in

In the early days of Transurban, the board was comprised of those who had raised the money, the financiers, and those who understood construction, the engineers. The initial view was that we were in the business of constructing a road. As the road construction was tendered out, eventually we had to take a long hard look at exactly what our mission was.

Kees van der Heijden introduced the concept of “the business idea” in his book Scenarios: The Art of Strategic Conversation. The business idea is really about understanding what your value proposition is and who your customers are. If you don't know who your customer is, and you do not know what the value is that they realise from the services or the goods that you deliver, then you will be inevitably basing your strategy on the wrong foundation.

While I have a construction background, I came to the board of Transurban as someone with a much broader base of knowledge. I didn’t look at the business from the lens of a finance person or an engineer, so one of my early contributions was challenging the board to look at what business we were really in.

Transurban started its life as a single purpose, one project company. If we were going to have longevity we had to grow our way out of that single purpose entity. When we broke the business down it became apparent that we were in the business of servicing people who use roads. While we had multiple stakeholders, where we added the most value to our customers was in helping them use the roads, and this was the direction we needed to orient our business towards.

From this realisation the theme of “Customer First” was born. It now underpins every aspect of the business, from customer safety to the level of service they receive on a telephone call. Essentially we transformed every aspect of Transurban’s systems and operations so that they focused in on the customer.

Like all good strategy, this thinking has continued to evolve over time, and technology has played an important role in that. Transurban is now an intelligent road and smart transport service provider, which was a natural evolution from a tolling system. It’s not enough to identify your value proposition and proceed from that point, the strategic thinking has to continuously progress to keep up with innovations in the industry and the changing demands of customers.

Transurban has been an outstanding success for investors, employees, customers and partner governments around the world. In my opinion, much of the success of the company is built on the early foundations of strong culture, diversity of talent and a deep understanding of the business.

Most of us know these are important factors in the long-term success of any company. From start-ups to the enterprise it’s easy to understand the importance of creating culture, diversifying your talent and really understanding your value proposition. But as easy as it is to say the words, but it’s much harder to build an organisation that embeds these behaviours over decades. That’s been the true success of Transurban – and for that the ultimate credit must go to the exceptional leaders and management team who have guided the organisation over the past 20 years.